Foreign brokerage Jefferies retained its buy call on airport operator GMR Airports Infrastructure, as it sees passenger traffic growing.
The brokerage kept its share price target of Rs 100 on GMR Airports intact, indicating an upside of ten percent from current levels.
Jefferies noted that the expansion in the Delhi and Hyderabad airports will help the firm see growing passenger traffic, as well as non-aero revenues.
GMR Airports Infrastructure (GIL) merged with GMR Airports Limited (GAL), which the company said was a significant step towards further strengthening its balance sheet to capitalize on upcoming growth opportunities. The merger will be completed during the current quarter.
The management is focusing on developing an airport platform strategy, and is attempting to consolidate the non-aero business in a bid to reduce complexity in its structure.
GMR Airports also filed a new tariff application for Delhi International Airport, which may be implemented in the last quarter of the current fiscal year.
A key focus of the management will be on managing the company's leverage in FY25.
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On May 27, Jefferies initiated coverage with a 'buy' call citing robust growth prospects. Analysts suggest that the company is slated to benefit from the strong air traffic growth outlook, travel retail opportunity, upward reset in aero tariffs, and real estate unlocking opportunity.
Furthermore, Jefferies believes that the company's growth story is evolving from a 'utility to a retail consumption play.'
The company's current move to simplify the corporate structure, improve leverage ratios, and support from Aéroports de Paris (ADP) will support re-rating. ADP has a 49 percent stake in GMR Airport.
GMR Airports is involved in the development, operation, and maintenance of airports, as well as providing integrated security solutions. Their airport portfolio includes three operational assets: Delhi International Airport and Hyderabad International Airport in India, and Mactan-Cebu International Airport in the Philippines.
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